Former NatWest CEO Alison Rose resigned her position last month having admitted to a “serious error of judgement” in discussing Coutts’ customer Nigel Farage’s banking arrangements with a journalist. The bank’s board initially stated that it maintained full confidence in Rose, but a decision for her to leave “by mutual consent” was agreed after Prime Minister Rishi Sunak voiced his concerns over her continuing to act as CEO.
Howard Davies, Chairman of the NWG Board, stated: “The Board and Alison Rose have agreed, by mutual consent, that she will step down as CEO of the NatWest Group. It is a sad moment. She has dedicated all her working life so far to NatWest and will leave many colleagues who respect and admire her.” Davies remains in post for now, though his term as chairman concludes in 2024.
Could Alison Rose have stayed in her role as NatWest CEO?
In her statement released just hours before her departure was confirmed, Rose said she did not reveal any personal financial information but she did admit discussing the reasons for Coutts decision to ‘de-bank’ Farage with a BBC journalist.
Her conduct was almost certainly in breach of her terms of employment, the bank’s confidentiality policies and her duty of confidentiality to clients of Coutts. She may also have breached her FCA duties. In light of her admission, the bank’s original decision not to part ways with Rose was perhaps surprising.
It seems that NatWest decided Rose’s position became untenable only when it became clear that the Prime Minister had lost trust in her, but it is hard to see how she could have continued in her role in light of her conduct. The bank would have continued to face tricky questions about compliance, extremely important in the banking industry, had it not parted way with a CEO who evidently breached its confidentiality policies.
The bank has faced criticism of its handling of the situation. Having made the decision that Rose would stay the board changed its position just hours later. To the outside world this looked like mismanagement but it is unusual for a board of directors to be put under such tremendous pressure to axe its CEO by the government and sections of the media.
What does a ‘mutual consent’ departure involve?
Stepping down by “mutual consent” is normally code for a negotiated settlement between employer and employee. Given her sudden departure, the terms of Rose’s ‘exit package’ will have been agreed hastily, with lawyers involved, and will almost certainly remain confidential. Rose’s settlement will likely consist of her notice pay, which I understand is 12 months’ salary, probably paid as a lump sum and subject to tax. She and the bank may also have agreed a settlement in respect of any incentive awards which have not vested.
The total ‘pay out’ Rose receives is therefore likely to be in excess of £1m (given that her total remuneration last year was over £5m including bonuses).
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